Her case appears to be the second and by far the largest win by a MedCap investor against a broker. Last May, FINRA awarded an investor $400,000 from Peak Securities Corp., which had already gone out of business.

Dozens of similar claims are pending.

Talbott, who works in Securities America's Newport Beach office, faces nine pending arbitrations related to MedCap, according to FINRA records.

Talbott did not return a phone message seeking comment for this story.

In his customer complaint information file on the FINRA website, which is public, Talbott said in response to the Wayman complaint that "claimant's allegations are completely without merit. Claimant is a high net worth, accredited investor, and the products were suitable for client based on her risk tolerance and objectives."

"The award was based on the specific facts of this investor's case, and we disagree with the outcome," said Janine Wertheim, president of Securities America Advisors Inc. and senior vice president of Securities America Inc. "Securities America does not believe it acted inappropriately in the sale of these investments."

The Securities and Exchange Commission sued MedCap in July 2009, alleging the Tustin lender operated a "Ponzi-like scheme."

MedCap sold investments in medical receivables, unpaid medical bills. But a court-appointed receiver concluded that most of the receivables on MedCap's books – some $542 million worth – simply did not exist.

Most of the other assets were of dubious quality, including a 118-foot yacht and two closed, unlicensed hospitals in New York and Atlanta.

The award to Wayman includes $734,118 in compensatory damages, to make up for her losses on MedCap, $250,000 in punitive damages, to punish Securities America for selling the investment in the first place and the balance for her costs in bringing the case.

MedCap itself cannot be sued because it is in federal receivership. That has forced investors like Wayman to go after the brokers.

User Agreement

Keep it civil and stay on topic. No profanity, vulgarity, racial
slurs or personal attacks. People who harass others or joke about
tragedies will be blocked. By posting your comment, you agree to
allow Orange County Register Communications, Inc. the right to
republish your name and comment in additional Register publications
without any notification or payment.